Optionvox uses option trading as a prediction market. Implied future stock price distributions for both call and put option outlooks are computed from current option transaction data at quarterly expiry dates using optimization and combined for a prediction. Volatility is estimated using nonparametric statistics and annualized to the standard format.
This volatility measure is based on complete current transaction data.
- annualized volatility: standard deviation of one-year log-returns
- call option: a contract giving the buyer the option to purchase a share of stock at a specified strike price before the expiry date
- put option: a contract giving the buyer the option to sell a share of stock at a specified price before the expiry date
- prediction market: a market for trading on the outcome of an event
